Mortgage Rates rose very slightly from Friday's new all-time lows. There were no major market moving events for interest rates today. Instead, we seem to be seeing a sort of 'leveling off' with last Thursday as the low point in terms of the broader bond market. Concerns over the European sovereign debt crisis continue to keep rates from moving too quickly in either direction, and are a major contributor in the low rates in general.
3.75% continues to hold the newly achieved status as "Best-Execution" for 30yr Fixed Conventional loans. That means that today's improvements were seen more in the form of decreased borrowing costs, or increased lender credit, as the case may be. If you're a first-time or even frequent reader looking for a bit more clarity on "best-execution," we recently updated the background page: What is A Best-Execution Mortgage Rate?
Today's slightly weaker rate sheets are interesting in the sense that they continue to support the notion that current levels have been, and will continue to be "the line in the sand," below which there is increasing difficulty in making further gains. It's interesting because Thursday's new all-time low rates are virtually indistinguishable (only slightly lower) than the all-time lows seen earlier this year.
Granted, this time around, they've stuck around in much more stable fashion, but we have yet to see a definitive break lower past a 3.75% Best-Execution. This isn't to say it can't or won't happen, just that it's a very sticky spot for mortgage rates. There has been, and continues to be limited historical incentive to holding out for rates any lower than this.
Loan Originator Perspective With Rates At All Time Lows
Julian Hebron Branch Manager, Loan Agent, RPM Mortgage
Consumers with strong stomachs can hold the line on waiting to refinance as we move into another summer that will be dominated by Eurozone debt contagion that'll keep our U.S. rates low. But they'd also be well served to capture all time record lows now. The decision to discuss with your lender is whether to buy your rate even lower now, or do a low- or no-cost refi now which will enable you to cost-effectively refi again if rates drop near-term.
Mike Owens, Partner with HorizonFinancial, Inc.
Leaning back towards locking while rates are still excellent. Not enough reward in floating in my book. Take what you can get now and renegotiate the lock if rates really tumble.
Bob Van Gilder, Originator, Finance One
If you are comfortable with the rate quote given, go with it. Remember patience is a Key ingredient to a successful close. Originators do not ask for items that are not needed.
Constantine Floropoulos, Quontic Bank
At these levels it is not beneficial to float. If you are closing in the window of 30 days we recommend locking in. Longer timelines have a bit more flexibility, however the risk of the market moving against us is too big of a risk. With the 10 YR treasury well under 2% we have to be conscious of the potential minimal reward vs. the unlimited risk if rates go higher.
Ted Rood, Senior Mortgage Consultant, Wintrust
US is now urging Europe to take a proactive approach to growth rather than embracing "Debt Ceiling 2 Debacle", scheduled for the lame duck session of Congress this winter? The MBS market continues to be all about Europe/Greece/France/etc, etc. While we lost a little ground today, the fundamental issues have not changed, nor are they likely to soon. That being said, as Stevie "Guitar" Miller said "Go on, take the money and run!" Biggest advice, whether you want to lock or float, get your loan in process! Failing to do so if you're wanting to refinance is just irresponsible in this market.
Jason York, Vice President of VA Operations at Prime Mortgage Lending, Inc
If I am within a 30-40 day window of closing a file, and the day is more or less sideways, and usually encouraging my customers to lock. Unless something major happens, there isn't much room to gain anything, but there is a lot more to lose.
Today's BEST-EXECUTION Rates
- 30YR FIXED - 3.75%
- FHA/VA -3.75%
- 15 YEAR FIXED - 3.125 edging down to 3.00%
- 5 YEAR ARMS - 2.625-3. 25% depending on the lender
Ongoing Lock/Float Considerations
- Rates and costs continue to operate near all time best levels
- Current levels have experienced increasing resistance in improving much from here
- Rates could easily move higher or lower, but given the nearness to all time lows, there's generally more risk than reward regarding floating
- But that will always be the case when rates operate near all-time levels, and as 2011 showed us, it doesn't always mean they're done improving.
- (As always, please keep in mind that our talk of Best-Execution always pertains to a completely ideal scenario. There can be all sorts of reasons that your quoted rate would not be the same as our average rates, and in those cases, assuming you're following along on a day to day basis, simply use the Best-Ex levels we quote as a baseline to track potential movement in your quoted rate).